Smaller broadband providers
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Thursday, 14 March 2024 11:13
Smaller broadband providers dominate wholesale growth on the NBN Featured
By Gordon Peters
Smaller broadband providers, Aussie Broadband, Vocus and Superloop, gained over 62,000 NBN wholesale services in the December 2023 quarter as the total number of residential broadband services on the NBN remained steady, according to the competition watchdog the ACCC’s latest market indicators report.
Aussie Broadband led the growth with an increase of over 30,000 services while Vocus and Superloop increased by about 15,000 each.
“Smaller providers combined now purchase around one-quarter of NBN wholesale services, and they are continuing to grow their customer base as they compete against the bigger retailers,” ACCC Commissioner Anna Brakey said.
Brakey said the three major broadband providers, Telstra, TPG and Optus, all acquired fewer wholesale services in the December 2023 quarter, totalling a decline of nearly 80,000 services.
The breakdown of wholesale speeds shows TPG and Optus saw the most change between the 50 Mbps and 100 Mbps tiers - andcombined, they purchased 730,000 more wholesale services at the 50 Mbps tier, and 780,000 fewer services at the 100 Mbps tier - with this shift following NBN Co’s new wholesale pricing that was introduced in December 2023.
According to the Australian Competition and Consumer Commission (ACCC), the change in wholesale speed tiers is unlikely to reflect an actual shift in household preferences from 100 Mbps services to 50 Mbps - rather, it is more likely that NBN Co’s wholesale price changes have led to the 50 Mbps wholesale tier being more cost-effective for supplying 50 Mbps retail services.
Under the previous wholesale cost structure, some retailers found bandwidth savings and overall cost benefits in purchasing 100 Mbps wholesale services to supply 50 Mbps at the retail level.
The report also shows that over 77,000 services were activated on the higher capacity fibre to the premises technology in the December 2023 quarter, and growth for 250 Mbps services and above continued, increasing by over 50,000 services.
“The growth in higher speed wholesale services shows that a segment of consumers want faster internet,” Brakey said, adding that “NBN Co’s recently announced proposal to provide much faster speeds on fibre to the premises and hybrid fibre coaxial services at no extra cost to providers would likely change the mix of wholesale speed tiers, and is something we would monitor closely.”
The ACCC also reports that NBN satellite services remained relatively steady, with a small decline of about 1,300 services, or 1.4 per cent, in the December 2023 quarter.
And, the average bandwidth (CVC) that NBN supplied to broadband providers increased to 4.8 Mbps per user in the December quarter, up from 3.1 Mbps in the previous quarter, which the ACCC says was “largely related to the new wholesale pricing arrangements and unlikely due to any changes in household usage”.
Further information, including time series data, is available on the ACCC website at NBN Wholesale Market Indicators Report.
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